Are European social safety nets tight enough? Coverage and adequacy of Minimum Income schemes in 14 EU countries

This study explored and compared the effectiveness of Minimum Income (MI) schemes for persons of working age in the European Union (EU). Using the European microsimulation model EUROMOD, we estimated indicators of coverage and adequacy of MI schemes in 14 EU countries. In terms of coverage, we found that in several countries, some individuals are ineligible for MI even when they fall below a poverty line set at 40 per cent of median income. With respect to adequacy, we show that in certain countries, a large fraction of those entitled to MI remain at very low levels of income even when MI benefit is added. Overall, our findings suggest that MI schemes in Europe remain divergent, and that their clustering may be more complex than has hitherto been allowed for. Key Practitioner Message:•The ability of European welfare states to fight poverty is a key policy question, especially at times of crisis;•Adequacy and coverage of Minimum Income schemes are crucial aspects of the answer;•Microsimulation allows us to separate the effectiveness of MI schemes 'by design', from issues of benefit administration, targeting errors and so forth. © 2012 Blackwell Publishing Ltd and the International Journal of Social Welfare